With total revenues of $15.75bn and operating profit of $2.22bn, UPS recorded year-on-year gains of 7.7% and 13%, respectively, for the second quarter (Q2) of 2017. For the half-year period (H1), company revenues totalled $31.07bn, having grown by 6.9%. Operating profit stood at $4bn, having grown 3.6%.
“Second quarter results were in line with our expectations and we are pleased with the progress on our strategic initiatives,” said Richard Peretz, UPS chief financial officer. “Looking at the second half of the year, our core business performance will continue to produce solid results.”
Each of the company’s three divisions produced improved revenue figures.
The Domestic segment benefitted from growing demand for e-commerce deliveries, which drove an 8.1% increase in revenue over 2Q 2016 to total $9.75bn. Next Day Air and Deferred Air shipments climbed 6.4% and 11% respectively, contributing to the growth. Revenue per piece increased across all products and was up 3.0% in total, aided by increased surcharges and other pricing measures, which also helped to maintain profitability; operating profit in the division rose by 13.14% to $1.4bn, raising the operating profit margin to 14.3%.
The International segment generated top-line improvement of 2.8% to $3.16bn, though operating profit fell by 4.57% to $585m. UPS notes that these results would have been better were it not for adverse currency effects, which had the impact of reducing operating profit by $114m. The division saw substantial volume increases in exports from Europe and Asia, though all regions contributed to a 12% volume increase.
The Supply Chain and Freight division produced a total revenue figure of $2.84bn after year-on-year growth of 12%, with operating profit up 23.96% to $238m. Though UPS does not split out the performances of the business units within the segment, the company stated that Coyote Logistics delivered double-digit revenue growth, whilst both the Freight Forwarding business and UPS Freight benefitted from volume increases. The Distribution business benefitted off the back of increased activity in the retail and aerospace sectors.
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